Abstract: Extemporaneous compounding can provide cost savings to the hospital, needed problem-solving options to the physician and stimulating challenges for the hospital pharmacist. In this discussion, the author covers the history of compounding, economic considerations, patients, hospital administrators, pharmacists, nurses, guidelines, meeting physician needs (assessment, equipment, chemicals and supplies, formulas, practice, liaison with community pharmacies that compound and sources). The author concludes that the hospital pharmacy should consider extemporaneous compounding when traditional hospital processes and procedures are not meeting the patient’s need.